Segment and Geographic Information

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017, the structure of our internal organization was divided into the following reportable segments, which were also our operating segments: Energy & Chemicals (“E&C”), Distribution & Storage (“D&S”), and BioMedical. During 2018, we executed a strategic realignment of our segment structure and divided our D&S segment into two segments: Distribution & Storage Western Hemisphere (“D&S West”) and Distribution & Storage Eastern Hemisphere (“D&S East”). We have split responsibility for D&S West and D&S East under different business leaders and associated internal reporting responsibilities. We believe these changes will facilitate our growth strategies, better align with our customer needs, and provide improved transparency of business results to our shareholders.

As a result of the divestiture of the respiratory therapy and on-site generation systems businesses described in Note 3, “Discontinued Operations,” and the acquisition or VRV as described in Note 12, “Business Combinations,” our reportable and operational segments now include: E&C, D&S West and D&S East. Our reportable segments are business units that are each managed separately. Our E&C segment manufactures, offers, and distributes distinct products with different production processes as compared to both our D&S West and D&S East segments. Our D&S West segment has principal operations in the United States and Latin America and primarily serves the Americas geographic region while our D&S East segment has principal operations in Europe and Asia and primarily serves the geographic regions of Europe, Middle East and Asia. Our D&S West segment also includes cryobiological storage manufacturing and distribution operations in the U.S., Europe and Asia, which serve customers around the world. Corporate includes operating expenses for executive management, accounting, tax, treasury, corporate development, human resources, information technology, investor relations, legal, internal audit, and risk management. Corporate support functions are not currently allocated to the segments.

We evaluate performance and allocate resources based on operating income as determined in our audited consolidated statements of income.

Segment Financial Information



	Year Ended December 31, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	390.5	$	455.5	$	246.3	$	(8.0	)	$	—		$	1,084.3
Depreciation and amortization expense	27.0		11.2		11.1		—			1.5			50.8
Operating income (loss) ^{(1) (2) (3) (5)}	25.5		101.2		19.3		(2.5		)	(51.4		)	92.1
Capital expenditures	15.5		6.0		10.4		—			3.7			35.6



	Year Ended December 31, 2017
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	225.6	$	400.6	$	232.3	$	(15.6	)	$	—		$	842.9
Depreciation and amortization expense	15.3		10.6		9.5		—			2.2			37.6
Operating income (loss) ^{(1) (4)}	5.1		85.2		14.2		(3.6		)	(62.4		)	38.5
Capital expenditures	15.5		4.1		11.1		—			2.3			33.0



	Year Ended December 31, 2016
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Corporate			Consolidated
Sales to external customers	$	154.3	$	378.1	$	197.6	$	(8.0	)	$	—		$	722.0
Depreciation and amortization expense	10.0		11.7		8.3		—			3.1			33.1
Operating (loss) income ^{(1) (4) (6)}	13.3		75.6		0.3		(2.1		)	(46.1		)	41.0
Capital expenditures	3.3		3.9		8.6		—			0.5			16.3

_______________


⁽¹⁾	Includes restructuring costs of $4.4, $11.2 and $9.5 for the years ended December 31, 2018, 2017 and 2016, respectively.


⁽²⁾	Includes an expense of $4.0 recorded to cost of sales related to the estimated costs of the aluminum cryobiological tank recall for the year ended December 31, 2018.


⁽³⁾	Includes transaction-related costs of $2.1 for the year ended December 31, 2018, which were mainly related to the VRV acquisition. Includes integration costs of $0.8 related to the VRV acquisition for the year ended December 31, 2018.


⁽⁴⁾	Includes transaction-related costs of $10.1 and $0.4 for the year ended December 31, 2017 and 2016, respectively.

⁽⁵⁾

During the year ended December 31, 2018, we recorded net severance costs of $2.3 primarily related to headcount reductions associated with the strategic realignment of our segment structure, which includes $1.8 in payroll severance costs partially offset by a $0.9 credit due to related share-based compensation forfeitures for 2018. Includes net severance costs of $1.4 related to the departure of our former CEO, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation forfeitures for 2018.


⁽⁶⁾	Includes asset impairment charges of $1.2 attributed to our D&S East segment.

Product Sales Information



	Year Ended December 31, 2018
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	262.1	$	—	$	—	$	—		$	262.1
Liquefied natural gas (LNG) applications	40.6		71.7		65.3		(2.0		)	175.6
Industrial gas production applications	13.6		—		—		—			13.6
HVAC, power and refining applications	74.2		—		—		—			74.2
Bulk industrial gas applications	—		148.5		126.1		(1.0		)	273.6
Packaged gas industrial applications	—		153.4		54.9		(3.5		)	204.8
Cryobiological storage	—		81.9		—		(1.5		)	80.4
Total	$	390.5	$	455.5	$	246.3	$	(8.0	)	$	1,084.3



	Year Ended December 31, 2017
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	152.9	$	—	$	—	$	—		$	152.9
Liquefied natural gas (LNG) applications	29.5		58.0		80.2		(0.2		)	167.5
Industrial gas production applications	22.4		—		—		—			22.4
HVAC, power and refining applications	20.8		—		—		—			20.8
Bulk industrial gas applications	—		129.6		93.4		(0.5		)	222.5
Packaged gas industrial applications	—		136.0		58.7		(14.9		)	179.8
Cryobiological storage	—		77.0		—		—			77.0
Total	$	225.6	$	400.6	$	232.3	$	(15.6	)	$	842.9



	Year Ended December 31, 2016
	Energy & Chemicals		D&S West		D&S East		Intersegment Eliminations			Consolidated
Natural gas processing (including petrochemical) applications	$	105.4	$	—	$	—	$	—		$	105.4
Liquefied natural gas (LNG) applications	38.2		45.9		67.0		(4.2		)	146.9
Industrial gas production applications	10.7		—		—		—			10.7
HVAC, power and refining applications	—		—		—		—			—
Bulk industrial gas applications	—		141.4		90.1		(0.8		)	230.7
Packaged gas industrial applications	—		120.2		40.5		(3.0		)	157.7
Cryobiological storage	—		70.6		—		—			70.6
Total	$	154.3	$	378.1	$	197.6	$	(8.0	)	$	722.0

Sales to Praxair and Linde, which combined in 2018, exceeded 10% of consolidated sales in 2018 on a combined basis and represented approximately $121.6 or 11.2% of consolidated sales in 2018 (attributable to all of our segments). Sales to Air Liquide, exceeded 10% of consolidated sales in 2016, and represented approximately $90.6 or 12.5% of consolidated sales in 2016 (attributable to all of our segments). In 2017, no single customer accounted for more than 10% of consolidated sales.



	Total Assets for the Year Ended December 31,
	2018		2017
Energy & Chemicals ^{(1) (2)}	$	889.2	$	782.9
D&S West	420.3		415.7
D&S East ⁽¹⁾	496.1		327.3
Corporate	92.1		93.9
Total assets of discontinued operations	—		104.9
Consolidated	$	1,897.7	$	1,724.7


⁽¹⁾	Total assets at December 31, 2018 includes $327.8 related to VRV (E&C $145.8, D&S East $182.0) of which $64.0 (E&C $27.4, D&S East $36.6) and $66.4 (E&C $33.2, D&S East $33.2) represented acquired goodwill and identifiable intangible assets, net, respectively. See Note 12, “Business Combinations,” for further information related to the VRV acquisition.


⁽²⁾	Total assets at December 31, 2017 includes $572.8 related to Hudson of which $238.3 and $211.0 represented acquired goodwill and identifiable intangible assets, net, respectively. See Note 12, “Business Combinations,” for further information related to the Hudson acquisition.

Geographic Information

Net sales by geographic area are reported by the destination of sales. Net property, plant and equipment by geographic area are reported by country of domicile.



	Sales for the Year Ended December 31,
	2018		2017		2016
United States	$	604.8	$	475.0	$	378.0
Foreign
China	115.1		101.3		84.7
Other foreign countries	364.4		266.6		259.3
Total Foreign	479.5		367.9		344.0
Total	$	1,084.3	$	842.9	$	722.0



	Property, plant and equipment, net as of December 31,
	2018		2017
United States	$	176.8	$	166.6
Foreign
China	77.2		82.4
Italy	52.9		2.0
Czech Republic	21.5		20.5
India	19.8		—
Germany	12.9		13.4
Other foreign countries	—		0.1
Total Foreign	184.3		118.4
Total	$	361.1	$	285.0